Home > Uncategorized > How many other peer to peer lenders are struggling?

How many other peer to peer lenders are struggling?

The news today that Ratesetter are struggling with bad loans totalling £80m will no doubt be met with an element of sangfroid in the established lending market. The peer to peer lenders have not been welcomed as competition and in the case of at least one leading funder, seen as a bit arrogant. On the other side of the coin is the fact that they are a boon for small and medium businesses who can be treated with barely concealed contempt by the major banks.

Not a happy overall picture and one that brokers such as myself have to bridge. We naturally welcome the choice but also there are some observations that I would be inclined to make.

Although it would appear that some of Ratesetter’s lending has been baffling on any level, the PTP’s insistence that all lending can be assessed fully on numbers alone is absurd and is guaranteed to result in huge mistakes. Numbers only ever reflect what had gone before and little towards the further prospects,  which is precisely what your lending is dependent on. You have to understand the business. You should always meet the principles.

They have also been guilty of not tapping into the experience of experienced lending professionals. That is lunacy in my opinion. No product in an existing market can properly succeed without understanding the market it is in and it’s strengths as well as weaknesses

I sincerely hope that Ratesetter and others are hear for many years to come but to do so may require some significant changes in mindsets

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